Have you fallen in love with a potential fixer-upper that needs a little more TLC than you were anticipating? Whether the roof needs work, the kitchen countertops need to be replaced, or that wall in the bathroom just needs to come down, don’t lose hope. With a rehab loan, you can get that property that needs a makeover and be able to fix it up the way you imagined. Whether you want to get it back on the market fast, or make it a vacation home for years to come, whatever your remodeling needs, with a rehab loan, we can help you get those costs covered quickly.
Here’s how the rehab loan process works:
Step 1: Get Qualified
The first step towards acquiring your new property is getting qualified for a hard money or rehab loan. You’ll need to have a conversation with your lender about what you can afford, and what your down payment will be, in addition to your qualifications like credit score and employment history. Once you’re pre-qualified, you’ll know what kind of property you can afford, and you’ll be able to adjust your search accordingly.
Step 2: Purchase Your Property
Once you’ve been pre-qualified, it’s time to start looking. With your loan pre-qualification letter in-hand, you can start shopping in your price range and perform a basic market analysis on each potential property. You’ll need to have an estimate of what the property’s projected value might be after you’ve completed renovations, also known as After Repaired Value (ARV). This will need to be determined by a third-party appraiser.
Step 3: Navigating Closing
Before you can officially close on your new property, the lender must approve the appraisal. With input from a good contractor, consultant, and real estate agent, you should be able to determine the extent of renovation work your potential property will need, what that work will cost, and the expected market value of the property after that work is completed (ARV). Once this information is finalized, the lender will consider the appraisal and the contractor’s bid for the work and determine the most appropriate loan program for you. From there, it is a few more items and then off to closing
Step 4: Construction
After you’ve closed on your new property, you have 30 days to begin construction. Funds will be distributed to contractors according to the loan agreement and supervised by either a consultant or other representative of the lender. Any changes to the initial agreement must be made in writing and approved by the lender. Once construction is complete, it’s time to move into your dream renovation home or you can flip it for a profit.
If you’re ready to get your new property funded and start on the repair work, check out Park Place Finance’s hard money/rehab loan program. Whether you’re ready for a vacation home or looking to become a fix-and-flip entrepreneur, we want to help your dreams come true by getting you funded quickly and efficiently. Contact Park Place Finance today and let us know how we can help.